Wednesday, December 12, 2012

The housing roller coaster continues

kw: real estate, market distributions

This morning I decided to check back to places we've lived, to see what real estate values have been doing in all those places. In nearly 40 years of marriage, we have owned six houses in four states. Zillow, one of my favorite web sites, has a ten-year price history for a house and its town or zip code (or both). That, plus my memory of what I sold a house for, is instructive.

We have been in our current house 17½ years, and its purported value has been on a bit of a roller coaster ride. Its present "Zestimate" value is 75% above the price we paid for it. However, in 2005 it was up 105%, while in 2009 it was up only 55%. Here is the Zillow history chart for a nearby home that happens to be for sale:

The current Zestimate is about $220,000, but the home is for sale at $290,000. Who knows, maybe they will get it. This particular neighborhood has been a little more stable than ours, and the downturn occurred later. However, compared to 15-20-year old prices, the current Zestimate is similarly some 70% higher, though the asking price is almost exactly double. The highest Zestimate has been near $265,000 and the recent low, in September, was just under $205,000. But now compare the first house we owned, in Anaheim:

Now, that's a roller coaster ride! Can you believe we first bought this house for $45,000? Of course, that was more than 35 years ago; we sold it two years later for $60,000, and prices in the area skyrocketed for years thereafter. The peak in 2005 was more than $600,000, which crashed in 2008 to $270,000. Its present Zestimate is $304,000, still more than five times what we sold for "way back when".

We moved from California to South Dakota before 1980. Zillow doesn't seem to have price histories for houses there, but the current Zestimate for both houses we owned while we lived there are also 75% above the prices we got when we sold them. We moved from SD to Oklahoma in the mid 1980s, and lived briefly in Ponca City before buying a home out of town. Here is a chart for a home up the block from the one we rented:

This home, currently valued near $127,000, is actually a better house than the one in Anaheim, larger and better built. It just happens to be half a mile north of the ConocoPhillips refinery, where you can often enjoy "the smell of money". In Ponca City, location is more important than national economic ups and downs. This home's price has stayed between $110,000 and $135,000 for these ten years, and was close to $100,000 even 20 years ago. The smaller homes closer to the refinery are all priced in the $30,000-40,000 range, and those prices have been exceedingly stable.

The two houses we owned, quite a bit farther from the refinery, were priced at $65,000 and $95,000 in the early and mid 1980s, but have risen in value, slid back, and are again on the upswing, being valued at $120,000 and $190,000 at present. That's another "location" factor. They are still in Oklahoma, and it is just not as pricey as the Philly area. The second house is similar in size and amenities to our present house, but for 65% the price. Of course, the Oklahoma homes are not colonials, they are ranch style. That design is quite scarce in this area.

We have wondered whether to move again after I retire. That'll be in the next couple of years. If we want lower home prices, Oklahoma would be good. We enjoyed South Dakota, but we are less tolerant of polar cold now. Or we may just stay here. Inertia and all that.

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